Sam Bankman-Fried was found guilty on all seven counts Thursday after a massive fraud and money laundering trial involving now-collapsed crypto exchange FTX and trading firm Alameda Research, charges that can lead to a maximum of 110 years in prison—and lawyers told Forbes he may face a decades-long sentence, unlike other white-collar defendants.
White-collar defendants often get far less than the maximum sentence—but legal experts told Forbes they expect Sam Bankman-Fried to face decades in prison.(Photo by Michael M. Santiago/Getty Images)
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Key Takeaways
- Most white-collar criminals whose maximum sentences could take up the rest of their lives end up only facing a small fraction of the maximum, with judges often basing their sentencing decisions on similar cases, Mitchell Epner, a former federal prosecutor and member of the law firm Rottenberg Lipman Rich, told Forbes.
- However, Epner said Lewis Kaplan, the Manhattan-based federal judge who presided over Bankman-Fried’s case, may decide to break the trend and give Bankman-Fried a majority of the 110-year maximum permitted by federal law when he’s sentenced next year—citing Ponzi schemer Bernie Madoff, who received a 150-year sentence in 2009.
- Both Epner and Vermont Law School professor Jared Carter told Forbes they think Bankman-Fried will likely be sentenced to multiple decades in prison, with Epner adding he would be surprised if Bankman-Fried receives a sentence below 25 years.
- Not only was Bankman-Fried convicted, Epner said, but he “lied repeatedly” on the stand, which Kaplan is allowed to factor into his sentencing decision.
- In addition to the seven charges Bankman-Fried has been convicted of, federal prosecutors also plan to hold a second trial focusing on alleged bribery, bank fraud and campaign finance violations, which will likely be factored into his sentencing, Carter said.
- Epner said he thought Kaplan “clearly did not have high regard for SBF as shown by the fact that he revoked bail prior to trial because of repeated violations.”
Crucial Quote
“If Judge Kaplan wants to, he can sentence SBF essentially to death by incarceration,” Epner said.
Key Background
Federal judges have broad discretion to sentence people convicted of crimes, often using a set of non-binding legal guidelines. The decision is largely based on the individual’s personal and criminal history and the nature of the crime, Carter told Forbes—and in Bankman-Fried’s case, “the nature of these crimes is pretty severe.” Bankman-Fried testified during the trial—a move Epner thinks could hurt him during sentencing, as federal prosecutors accused him of lying “about big things and small things” and pointed out that he said he “couldn’t recall” over 140 times. “When some people said SBF had nothing to lose by taking the stand because the trial was going badly for him, they ignored the fact that trial perjury would hurt SBF, potentially, in guiding the judge on how to exercise his discretion,” Epner told Forbes. Deterring future crimes is another factor in sentencing, Carter told Forbes. “If we don’t see a significant or meaningful sentence, then I think the deterrence effect is much less, and when we’re talking about what happened here, we need deterrence,” Carter added.
News Peg
Bankman-Fried, 31, was charged in late 2022 with money laundering, wire fraud, securities fraud and other counts alleging he used customer money from failed crypto exchange FTX to prop up his other firm, Alameda Research. He pleaded not guilty to the charges, which marked a stunning fall from grace for a one-time billionaire who ran one of the world’s largest crypto exchanges. A jury reached a verdict after less than five hours of deliberation following his five-week trial. In a closing statement, prosecutor Nicolas Roos said there was “no serious dispute” that $10 billion worth of customer money disappeared from FTX, and said Bankman-Fried “schemed and lied to get money, which he spent,” CNBC reported. Mark Cohen, who served as Bankman-Fried’s defense attorney, said prosecutors were trying to paint Bankman-Fried as a “villain,” and that FTX’s collapse was not his fault.
What To Watch For
Bankman-Fried’s sentencing is set for March 28, 2024, and will be decided by the trial court judge. “If Kaplan decides to give 110 years, there would be virtually nothing SBF could do on appeal,” Epner said. “It would be a lost cause.” On the other hand, Epner said Bankman-Fried could face the same fate as Theranos founder Elizabeth Holmes, who received a sentence of just over 11 years out of a maximum 80 years. In an opinion piece for The Daily Beast, Epner argued Holmes’ sentence was overly lenient.
Tangent
Former FTX-co-founder Gary Wang and former Alameda Research CEO Caroline Ellison pleaded guilty to fraud last December, and were cooperating with federal authorities to investigate FTX and Bankman-Fried. FTX’s top engineer Nishad Singh also pleaded guilty in February. All three testified against Bankman-Fried at trial. Due to their cooperation, criminal defense lawyers told Bloomberg the three will likely get little to no time in prison.
This article was originally published on forbes.com and all figures are in USD.
